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LEASES

12 Months Ended

Dec. 31, 2024

NOTE 9 – LEASES

The Company leases office space domestically under operating leases including: (1) the Company’s headquarters in New York, New York for which the lease expires in 2028, (2) a marketing and sales center in Huntington Beach, California for which the lease expires in 2027, (3) a patient care center in Greenville, South Carolina for which the lease expires in 2031, with an additional five year option to extend, for which the Company expects to utilize, (4) warehouse and fulfillment centers in Columbia, Pennsylvania and Lancaster, Pennsylvania for which the leases expired in 2024 and (5) a warehouse and pharmacy operations center in Lancaster, Pennsylvania for which the lease expires in 2029, with an additional five year option to extend, for which the Company expects to utilize. WorkSimpli leases two office spaces in Puerto Rico for which the leases expire in 2026.

The following is a summary of the Company’s operating right-of-use assets and operating lease liabilities as of December 31, 2024:


Right-of-use assets	$	6,400,596
Current operating lease liabilities	$	508,537
Noncurrent operating lease liabilities	$	6,265,192

The table below reconciles the undiscounted future minimum lease payments under the above noted operating leases to the total operating lease liabilities recognized on the consolidated balance sheet as of December 31, 2024:


Fiscal year 2025	$	1,109,302
Fiscal year 2026		1,339,435
Fiscal year 2027		1,231,623
Fiscal year 2028		931,879
Fiscal year 2029		772,833
Thereafter		5,676,825
Less: imputed interest		(4,288,168	)
Present value of operating lease liabilities	$	6,773,729

Operating lease expenses were $1.2 million and $861 thousand for the years ended December 31, 2024 and 2023, respectively, and were included in other operating expenses in our consolidated statement of operations.

Supplemental cash flow information related to operating lease liabilities consisted of the following:

	December 31,
	2024			2023
Cash paid for operating lease liabilities	$	831,260		$	897,883
Weighted average remaining lease term in years		10.39			2.18
Weighted average discount rate		10.96	%		7.17	%

We have elected to apply the short-term lease exception to the warehouse and fulfillment center spaces we leased in Columbia, Pennsylvania and Lancaster, Pennsylvania for which the leases expired in 2024. These leases had a term of less than 12 months and were not recognized on the balance sheet, but rather expensed on a straight-line basis over the lease term. Straight-line lease payments are approximately $2 thousand and $3 thousand per month, for Columbia, Pennsylvania and Lancaster, Pennsylvania, respectively. Additionally, the Company utilizes office space in Puerto Rico on a month-to-month basis incurring rental expense of approximately $3 thousand per month.